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Online Share Trading

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To Chartist

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asylum
Super Contributor
found this link to day trading thought you might find interesting and maybe your thoughts on this guys post. The so call higher risk associated with day trading comes not from the risk to market exposure but from expectancy. If your 'system' has a negative expectancy and you are day trading you are going to blow up much quicker than a buy and hold system or even a swing trading system. I think many people judge their system on a small amount of trades in a bull market and think they have made it. As soon as they try day trading they blow up because the averages get to there ultimate result much quicker. They walk away with very burnt fingers thinking "boy that is too risky" when really if they had a system with positive expectancy after brokerage they soon see that as a day trader your risk is by the nature of being flat at the end of the day verylow. http://www.aussiestockforums.com/forums/showthread.php?t=9151
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13 REPLIES 13
Electrox
Super Contributor
Hey asylum. I wanted to ask you a question from the another post about the 3.5% profit on 340 000 Exposure to SSF. how many SSF do you hold at any one time and is 3.5% your target before taking profits. I just started on day trading and learning a lot from posts on this forum. apreciate any insights given.
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asylum
Super Contributor
Hi Electrox i usually buy R 100 000 worth of futures at a time and may hold three or more different ones at any one time. 3.5% is just an example i would first work out an entry and an exit stategy before buying any position whether long or short. So the profit will differ depending where my exit srategy is set for a particulat stock, here is an example and this is only my opinion i will enter KIO in a long trade at around R 262.00 and exit at around 295.00 .
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Champ_golfer
Frequent Contributor
Asylum buy any stock SSF's in EXX,MRF,HAR,and MTX tue each week at market exactly 9:31 eissh and sell at Friday 16:30-16:40 and reap the profits Trade 2 SSF's for about 20k each (IM around 40k) and leave 10k for downside leverage to be safe Take profits each day or between R4k-5k as various stocks go up and down, buy low and sell high or sell double at high and ride wave short downwards and make double whammie Good luck
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Electrox
Super Contributor
I see Asylum, In such a volatile market at the moment, what parameters would you use to enter a trade? I usually use stochastics ,MACD and EMA's. but My problem is the stop loss. what % do u use as a stop loss after buying a SSF? Eg. I bought AGL today at 400.00. is it worth putting such a tight stop loss of lets say 3%
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asylum
Super Contributor
I use rsi and macd as guides only i draw trend lines and then look where the support and resistance lie and enter my trades accordingly i also use candle signals to futher confirm my decision and any other bit of info which may influence the share such as volume (wide ranging days) sens news, reaction of overseas markets overnight and so on. So as an example if KIO was already at my entry level price overnight and the DOW tanked 2% overnight i would not enter at that level because in all likelyhood the price will drop even futher due to events in the USA and hopefully i can get in even cheaper. but all this is only my opinion of course, good trading.
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Electrox
Super Contributor
thanks for your feedback. what about the stop loss you use once in a position? I guess it will just take some time to develope my own trading system. But I have definetely realised that the importance of position size when trading. can you believe my first trade was for R2000. heh guess we all make mistakes as beginners, but persistence will prevail. Live and learn.
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asylum
Super Contributor
i dont use stop loses on my ssf probably will regret it one day but try to trade shares that are trending and also sectors that are trending but i spend quite a lot of time checking the markets everyday at least 4 hour everyday in case some nasty comes up and bites me in the butt.Oh and if you dont want to use stop loss use price alerts in your watchlist at least it wil give a warning of any inpending doom that might arise. Cheers
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JDT
Regular Contributor
Also found this on the site asylum mentioned and posted it here since it really is relevant. The road to become a profitable trader. 1. We accumulate information - buying books, going to seminars and researching. 2. We begin to trade with our 'new' knowledge. 3. We consistently 'donate' and then realise we may need more knowledge or information. 4. We accumulate more information. 5. We switch the commodities we are currently following. 6. We go back into the market and trade with our 'updated' knowledge. 7. We get 'beat up' again and begin to lose some of our confidence. Fear starts setting in. 8. We start to listen to 'outside news' and to other traders. 9. We go back into the market and continue to 'donate'. 10. We switch commodities again. 11. We search for more information. 12. We go back into the market and start to see a little progress. 13. We get 'over-confident' and the market humbles us. 14. We start to understand that trading successfully is going to take more time and more knowledge than we anticipated. MOST PEOPLE WILL GIVE UP AT THIS POINT, AS THEY REALISE WORK IS INVOLVED. 15. We get serious and start concentrating on learning a 'real' methodology. 16. We trade our methodology with some success, but realise that something is missing. 17. We begin to understand the need for having rules to apply our methodology. 18. We take a sabbatical from trading to develop and research our trading rules. 19. We start trading again, this time with rules and find some success, but over all we still hesitate when it comes time to execute. 20. We add, subtract and modify rules as we see a need to be more proficient with our rules. 21. We feel we are very close to crossing that threshold of successful trading. 22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology. 23. We continue to trade and become more proficient with our methodology and our rules. 24. As we trade we still have a tendency to violate our rules and our results are still erratic. 25. We know we are close. 26. We go back and research our rules. 27. We build the confidence in our rules and go back into the market and trade. 28. Our trading results are getting better, but we are still hesitating in executing our rules. 29. We now see the importance of following our rules as we see the results of our trades when we don't follow the rules. 30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better. 31. We continue to trade and the market teaches us more and more about ourselves. 32. We master our methodology and our trading rules. 33. We begin to consistently make money. 34. We get a little over-confident and the market humbles us. 35. We continue to learn our lessons. 36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size. 37. We are making more money than we ever dreamed possible. 38. We go on with our lives and accomplish many of the goals we had always dreamed of.
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topgun
Super Contributor
Talking about educating oneself - I really think you guys must read "Fooled by randomness" authored by Nassim Taleb - twice.
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JDT
Regular Contributor
Topgun, have you read "The Black Swan"?
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topgun
Super Contributor
next on the list, yourself?
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Not applicable
some of the little narrative you gave is true but this is usually how it goes......we come to the market....bloody marvelous...we make money...hey this easy!....we start taking bigger chances and we start losing money....we wipe out....maybe even a couple of times...we blame our system...we start looking for the perfect system....the perfect indicator...the holy grail......once we think we have it we start trading but because we are petrified of losing money this time we trade very cautiously...too cautiously in fact...stops too tight and we don't take the trades when we should ....we wait and because we are so tardy we end up buying when the buying is about to turn into selling and vice versa.....then we get angry....kick the dog and the cat....cant even shout at the wife anymore cause she has left by this time.....we blame the markets...
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Champ_golfer
Frequent Contributor
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